Bangladesh Bank Launches Dedicated Division for Islamic Banking

In a significant move to enhance the structure and governance of Islamic banking in the country, Bangladesh Bank has established a new division titled "Islamic Banking Regulations and Policy" at its Head Office. The initiative was announced through a recent circular issued by the central bank’s Financial Institutions and Markets Department.

For years, experts in the field have been advocating for a dedicated, Shariah-based supervisory authority to oversee Islamic banking. While a central Shariah Supervisory Committee has yet to be formed, the new division is expected to streamline and strengthen Shariah-compliant banking operations across the country.

According to the circular, all regulatory and policy-related matters concerning Islamic banking will now be handled through this new division, ensuring centralized oversight and policy coordination.

In addition to this, Bangladesh Bank has also introduced three more specialized divisions: Bank Inspection Department-9 and Inspection Compliance Department- to ensure follow-up actions post bank inspections

Anti-Money Laundering and Combating Financing of Terrorism (AML & CFT) Department- to effectively carry out responsibilities under the Money Laundering Prevention Act 2012 and related regulations.

These steps are expected to bring greater transparency, accountability, and efficiency to the country’s banking sector, according to officials from the central bank.